On May 25 2018, the Council of the European Union adopted a directive concerning the mandatory automatic exchange of information in the field of taxation, in relation to reportable cross-border arrangements (Council Directive (EU) 2018/822).  This EU mandatory disclosure regime, known as the DAC6 Directive, aims to increase transparency by requiring intermediaries and, in certain circumstances, taxpayers, to report cross-border transactions that are deemed to represent aggressive tax planning.

On 25 May 2018, the Council of the European Union adopted a directive concerning the mandatory automatic exchange of information in the field of taxation, in relation to reportable cross-border arrangements (Council Directive (EU) 2018/822). This EU mandatory disclosure regime, known as the DAC6 Directive, aims to increase transparency by…

In brief Luxembourg Prime Minister, Mr. Bettel, announced on 13 October 2020 some new tax measures during the state of the nation speech. You may recall that a structural tax reform to take place in 2021 was announced by the Minister of Finance, Mr. Gramegna, in July 2019. The Covid-19 outbreak has…

On 14 May 2020, the European Court of Justice (ECJ) issued its decision on case (C-749/18) further to a request for a preliminary ruling by the Luxembourg Administrative Court on 30 November 2018. The ECJ ruled that the strict distinction made by the Luxembourg tax authorities between the vertical and horizontal tax unity regime is contrary to the freedom of establishment set forth in articles 49 and 54 of the Treaty on the Functioning of the European Union (TFEU).

As a result, an EU non-integrating parent entity (i.e., share capital company or permanent establishment) should be able to combine horizontal and vertical tax unity without terminating the pre-existing fiscal unity nor triggering any negative tax consequences resulting from such a termination. Indeed, under Luxembourg current tax consolidation rule, the end of tax unity group before the end of the five years minimum period entails a retroactive tax assessment of each entity on a stand-alone basis.

On Saturday 21 March 2020, the Luxembourg Parliament passed the law implementing the Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (the DAC 6 Law). The DAC 6 Law…